calculate the next annual dividend payment for stock current

calculate the next annual dividend payment for stock currently selling for $50 per share. with a 16% expected total return and a 10% expected constant growth rate?

Solution

Expected return=(D1/Current price)+Growth rate

0.16=(D1/50)+0.1

Hence D1=(0.16-0.1)*50

which is equal to

=$3=next annual dividend payment.